What will be next bubbles in world economy?

We ask experts to assess the risks to investors after warnings over strength of government bonds, gold and income funds

Investors have piled into gilts and gold in the bear market, but there are growing fears they have created a bubble that could burst as soon as the economy starts to pick up.

Gilts

Analysts were already talking about a bubble in government bonds even before last week's failed conventional gilt auction - the first for more than a decade.

The government issues gilts when it needs to raise money. Investors earn a fixed rate of interest for the term, plus their capital back on maturity - unless the government goes bust. This is highly unlikely - the government didn't even default on its bonds in the 1970s IMF crisis.

Once issued, gilts are traded in the open market, where prices have soared recently as interest rates fall, making the fixed interest on gilts look more attractive.

The average gilt fund is up 8% over the past 12 months, compared with a fall